How HR Pros Can Tackle Employee Stress Factors
Workplace Stress is Costing Organizations $300 Billion Annually
Cue the tense muscles, upset stomach, headache and rapid heartbeat. We’ve all felt it and it’s all too familiar of a feeling. Stress affects all of us, but for HR teams, workplace stress has become the silent crisis. An organization’s ability to deal with the alarming impact of stress can mean the difference between success and failure.
By the numbers, stress is estimated to cost U.S. businesses $300 billion annually—or $2,000 per employee every year, according to the 2015 Workplace Benefits Report: Helping employees live their best financial lives. The number one cause of stress is financial stress, with a new report flagging that 85% of employees have reported at least some level of financial strain, according to the American Psychological Association and Financial Finesse
Numbers don’t lie, and to stop productivity and revenue leakage caused by the employee stress factor, HR professionals are pressed more than ever to address the issue head on.
Pay Raise Euphoria
Many are familiar with two trending news topics related to employees’ financial constraints. In January, Walmart announced that more than 1.2 million of its associates will receive a pay increase under the company’s two-year, $2.7 billion investment in workers. The pay raise is one of the largest single-day, private-sector pay increases ever.
Seattle-based Gravity Payments also made headlines when its CEO said he was setting a new minimum salary of $70,000 for each employee. It later received backlash when dismayed customers withdrew business as the move was viewed as a political statement or reason to increase fees.
It’s no surprise that one of the best ways to improve employee financial wellness - and minimize the stress that goes with living paycheck-to-paycheck - is by issuing a company-wide salary increase. Unfortunately, for most employers, this is not realistic, possible, or financially sound. It's not something most executives would ever endorse.
You will always want to make pay raises and staying current with national pay scale indexes part of your recipe for achieving organizational objectives. But, you can alleviate employees’ financial pressure through other methods. You can do this by following these three steps - none of which require a large price tag to implement.
Step 1: Look Beyond Retirement Planning
SHRM recently looked at the impact of financial challenges in the workplace in an effort to better understand why workers are continuing to struggle financially, even as the economy improves. According to HR professionals in the SHRM Survey Findings: Financial Wellness in the Workplace, retirement planning was flagged as the financial offering most interesting to employees.
You should always encourage your employees to prepare for the future. However, HR professionals need to understand that financial wellness is not one and done. Options like a 401(k) program are not usually the answer for erasing financial stress. And they aren’t immediately gratifying for the 76% of working Americans living paycheck-to-paycheck, according to a Bankrate.com survey.
If you look through the employee lens, their top financial concern is not having enough emergency savings for unexpected expenses. This fact was proven in a recent PwC study.
To mitigate financial stress and worry, employers should explore offering healthy financing benefits that allow employees to make large, unexpected, or emergency purchases, without having to resort to the high-cost alternatives that dominate the market today.
This is the real financial wellness solution that can provide employees with stress relief and in turn, a more productive and focused workplace.
Step 2: Get Back to the Basics
General budgeting advice and education can speak volumes to today’s employee. Everyone’s financial situation and corresponding stress are unique to them, but you can share basic, timeless principles that will help employees control finances.
Consider creating a financial wellness library to ignite responsible habits. Stock it with content that covers budgeting, earning potential, impulse spending, retirement, and savings.
If an HR team wants to take a resource library to the next level, they can explore monthly lunch-and-learns where a financial expert walks through each topic in detail. For example, the budgeting subject may focus on the importance of paying bills on time, keeping expenses under control, and the perils of revolving credit.
Regardless of the route you take, HR must effectively communicate the availability of the offering to encourage participation and see results.
If a financial wellness library sounds overwhelming, take comfort because companies will seamlessly offer this information to employers for free, putting no obligation on the HR team.
Step 3: Be a Resource for the Financially Secure and Insecure
When analyzing why employee financial stress is off the charts, it’s difficult to ignore the fact that many wellness programs are unintentionally mapped around the needs of the financially secure. They overlook the needs of those who are financially insecure.
Investment advice and retirement planning are great. You can't deny that they can help relieve common pressures. However, these tactics may not give organizations their best return as they relate to the general employee population.
Now that you know that the top financial concern of many employees is having funds for unexpected expenses, add programs for employees that address this need. Explore options that include interest-free purchasing programs.
By the numbers, 94% of workers agree or somewhat agree that having access to an employee purchasing program helps reduce their financial pressure and stress according to a study that looked at the “9 to 5” impact of financial stress. Fulfilling a company’s financial benefits gap with this type of program is one of the easiest ways to free employees of tolling cash constraints.
And, today’s options are designed to ensure that HR pros can implement a program within 24 hours. This alleviates the worry of taking on another benefit that is too time-consuming. The cost savings that is returned to the company via talent acquisition, retention, loyalty, engagement, and productivity can instantly position the HR team as progressive leaders who enhance their organization’s reputation.
The Bottom Line
There is no magic wand that will make workplace stress disappear, but chipping away at its sources can help put companies on the path to success.
Studies show that employers who invest in educating employees in personal finance will see a 3 to 1 return on investment, improve their bottom line, and enjoy a more satisfied and productive workforce. ("It’s Time to Create a Financially Literate Workforce to Improve the Bottom Line.” Benefits Compensation Digest 46 (4): 1, 11-14)
With three out of four employees living paycheck-to-paycheck, the employee stress factor may not go away overnight, but there’s never been a better time to tackle the issue with help from effective financial wellness benefits.